79R5147 PAM-F

By:  Eltife                                                       S.B. No. 1103


A BILL TO BE ENTITLED
AN ACT
relating to the powers and duties of the General Land Office and the disposition of certain unsurveyed public school land. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subchapter E, Chapter 51, Natural Resources Code, is amended to read as follows:
SUBCHAPTER E. SALE AND LEASE OF VACANCIES
Sec. 51.171. PURPOSE; APPLICATION OF OTHER LAW. (a) This subchapter controls the purchase and lease of vacant land and the authority of the commissioner and the board to: (1) determine whether a vacancy exists; and (2) sell and lease vacant land. (b) To the extent a provision of this subchapter conflicts with another law relating to vacant land or Chapter 2001, Government Code, this subchapter controls. [(c) Chapter 2001, Government Code, does not apply to a proceeding under this subchapter.] Sec. 51.172. DEFINITIONS. In this subchapter: (1) "Administratively complete" means a vacancy application that complies with Section 51.176 and any rule adopted by the commissioner regarding the filing of a vacancy application. (1-a) "Applicant" means any person, including a good-faith claimant, who files a vacancy [an] application [to purchase or lease a vacancy]. (1-b) "Application commencement date" means: (A) the date, as designated in the commissioner's notice to the applicant required by Section 51.177(b); or (B) the date, as designated in the commissioner's notice to the applicant required by Section 51.177(d), indicating that any deficiency in the vacancy application has been resolved. (2) "Good-faith claimant" means a person who, on the application commencement date: (A) occupies or uses or has previously occupied or used, or whose predecessors in interest in the land claimed to be vacant have occupied or used, the land or any interest in the land [a vacancy] for any purposes, including occupying or using: (i) the surface or mineral estate for any purposes, including [other than] exploring for or removing oil, gas, sulphur, or other minerals and geothermal resources from the land; (ii) an easement or right-of-way; or (iii) a royalty or leasehold interest; [vacancy; and] (B) has had, or whose predecessors in interest have had, the land claimed to be vacant [vacancy] enclosed or within definite boundaries recognized in the community and in possession under a chain of title for a period of at least 10 years with a good-faith belief that the land [vacancy] was included within the boundaries of a survey or surveys that were previously titled, awarded, or sold under circumstances that would have vested title in the land [vacancy] if the land [vacancy] were actually located within the boundaries of the survey or surveys; (C) is the owner of land: (i) that adjoins the land claimed to be vacant; and (ii) for which no vacancy application has been previously filed; or (D) holds title under a person described by Paragraph (A), (B), or (C) or is entitled to a distributive share of a title acquired under an application filed by a person described by Paragraph (A), (B), or (C). (3) "Interest" means any right or title in or to real property, including a surface, subsurface, or mineral estate. "Interest" includes a right or title described as follows: (A) a fee simple title; (B) a determinable fee or other leasehold or mineral interest created under a conveyance instrument, including a mineral lease; (C) a mineral royalty, nonparticipating royalty, or overriding royalty interest; (D) a life estate; (E) a remainder or reversionary interest; or (F) a secured interest under a lien ["Interested person" means a person, excluding a good-faith claimant or an applicant, who has a present legal interest in the surface or mineral estate of the land claimed to be vacant]. (4) "Necessary party" means: (A) an applicant or [, interested person, and] good-faith claimant whose present legal interest in the surface or mineral estate of the land claimed to be vacant may be adversely affected by a vacancy determination; (B) a person who asserts a right to or who claims an interest in land claimed to be vacant; (C) a person who asserts a right to or who claims an interest in land claimed to be vacant or in land adjoining land claimed to be vacant as shown in the records of the land office or the county records, including tax records, of any county in which all or part of the land claimed to be vacant is located; (D) a person whose name appears in the records described by Paragraph (C); or (E) an attorney ad litem appointed under Section 51.180. (5) "Vacancy" means an area of unsurveyed public school land that: (A) is not in conflict on the ground with land previously titled, awarded, or sold; (B) has not been listed on the records of the land office as public school land; and (C) was not, on the application commencement date [of filing of an application]: (i) subject to an earlier subsisting application; [or] (ii) subject to a vacancy application denied with prejudice; (iii) the subject of pending litigation relating to state ownership or possession of the land; or (iv) subject to a previous vacancy application that has been finally adjudicated by the commissioner or a court of this state or the United States. (6) "Vacancy application" means a form submitted to the commissioner by an applicant to: (A) initiate a determination by the commissioner whether land claimed to be vacant is vacant; (B) purchase vacant land; or (C) lease vacant land. Sec. 51.173. DISPOSITION OF VACANT LAND. (a) Vacant and unsurveyed public school land shall be located, sold, and leased under this subchapter, except: (1) submerged lands within tidewater limits; (2) all islands, flats, and emergent lands within tidewater limits; (3) natural lakes; and (4) riverbeds, including channels and islands in riverbeds, above tidewater limits. (b) This subchapter does not alter or diminish the public domain status of the surface estate of riverbeds and channels and islands in riverbeds that are located above tidewater limits. Sec. 51.174. GENERAL POWERS AND DUTIES OF COMMISSIONER. (a) The commissioner may: (1) delegate responsibility for implementing this subchapter; [and] (2) perform any other act necessary to administer and implement the purposes of this subchapter, including entering into a contract with a private party to provide the notices required under this subchapter; and (3) terminate without prejudice a vacancy application if an applicant fails to comply with this subchapter or a rule adopted under this subchapter. (b) The commissioner may grant an extension of time to comply with a requirement under this subchapter. For each application, the commissioner may grant not more than a total of 30 days in extensions of time to comply with one or more requirements of this subchapter, excluding any extensions of time related to the survey report under this subchapter. The commissioner may grant not more than 90 days in extensions of time to comply with a requirement related to the survey report under this subchapter. (c) The commissioner shall adopt rules necessary and convenient to administer this subchapter. (d) [(c)] The commissioner shall advise the board relating to the market value of the surface, [and] mineral, and leasehold estates of vacant land. Sec. 51.175. GENERAL POWERS AND DUTIES OF BOARD. (a) The board shall set the terms and conditions for each sale and lease of a vacancy. (b) The board shall adopt rules governing the terms and conditions for the sale and lease of a vacancy. The rules shall be adopted and amended as necessary to be consistent with real property law of this state and other applicable law. (c) The board may adopt rules governing mineral classification, royalty reservations, and awards of royalty reservations and preferential rights to an applicant or to a good-faith claimant in addition to the provisions prescribed by this subchapter. Sec. 51.176. VACANCY APPLICATION; FILING. (a) To purchase or lease land claimed to be vacant, a person must file a vacancy [an] application on a form prescribed by the commissioner. A completed application must include: (1) a description of [describe] the land [that is] claimed to be vacant that is sufficient to locate the land on the ground; (2) a written statement indicating [state] whether the applicant seeks to purchase the land [that is] claimed to be vacant or obtain a mineral lease on the land or both purchase the land and obtain a mineral lease on the land; (3) a list, in a format prescribed by the commissioner, containing [state] the name and last known mailing address of each necessary party whose name appears in the records described by Section 51.172(4)(C) [person who, from facts known to the applicant, asserts a present legal interest in the land claimed to be vacant]; (4) an affidavit executed by the applicant affirming that the applicant conducted a diligent search of all the records described by Section 51.172(4)(C) in preparing the list required by Subdivision (3); (5) if applicable, a statement of [state] the basis for and [provide] documentary proof for an assertion of good-faith-claimant status; (6) at the applicant's discretion: (A) a survey report prepared by a licensed state land surveyor or the county surveyor of the county in which a majority of the land claimed to be vacant is located; or (B) an abstract of title to any land that adjoins the land claimed to be vacant; and (7) [(5) provide] any other information required by the commissioner. (b) The applicant must file the original and a duplicate copy of the vacancy application with the county clerk [surveyor] of each [the] county in which all or part of the land claimed to be vacant is located. [If the county does not have a county surveyor, the application must be filed with the county clerk.] (c) The [county surveyor or] county clerk[, as applicable,] shall mark the exact date and hour of filing on the original and a duplicate copy of the vacancy application and shall return a marked copy to the person filing the application. The original shall be recorded in a book kept for that purpose separate from the deed or real property records. The failure to record a vacancy [an] application as provided by this subsection does not affect the validity of the application filing. (d) Not later than the fifth day after the date an applicant files the vacancy application with the county clerk, the applicant shall file a duplicate copy of the marked copy received from the county clerk with the county surveyor of each county in which all or part of the land claimed to be vacant is located if that county has a county surveyor. (e) Priority among vacancy applications covering the same land claimed to be vacant is determined by the earliest time of filing indicated by the date and hour marked on the application by the [county surveyor or] county clerk. (f) [(e)] The applicant shall submit to [file with] the commissioner two duplicate copies of the marked copy that has been file-stamped by the county clerk [the duplicate copy of the application with the county official's mark indicating the time of filing] not later than the 30th day after the date the vacancy application is filed with the county [surveyor or] clerk. The commissioner shall mark the date the two duplicate copies are received on each copy, assign a file number to the vacancy application, and return a marked duplicate copy containing the file number to the applicant [If the 30th day after the date of filing falls on a Saturday, Sunday, or state or federal holiday, the application may be filed on the next regular business day following the 30th day]. (g) The applicant shall include a filing fee set by the commissioner in an amount of not less than $100. Sec. 51.177. PROCESSING VACANCY APPLICATION. (a) Not later than the 45th day after the date the applicant files the duplicate copies with the commissioner as provided by Section 51.176(f), the commissioner shall: (1) determine whether the vacancy application is administratively complete; and (2) provide to the applicant the notice required by this section. (b) If the commissioner determines that the vacancy application is administratively complete, the commissioner shall provide written notice to the applicant that: (1) informs the applicant that the application is administratively complete; (2) states the application commencement date; and (3) states the amount of any deposit required under Section 51.178 and the date by which the applicant must pay the deposit. (c) If the commissioner determines that the vacancy application is not administratively complete, the commissioner shall provide written notice to the applicant that: (1) informs the applicant that the application is not administratively complete; (2) provides a list of any deficiencies the applicant must resolve; and (3) states a reasonable period of not more than 30 days from the date of the notice to resolve any listed deficiencies. (d) Not later than the 30th day after the date provided under Subsection (c)(3) to resolve any deficiencies, the commissioner shall determine whether the vacancy application is administratively complete. If the commissioner determines that the vacancy application is administratively complete, the commissioner shall provide the notice required by Subsection (b). If the commissioner determines that the vacancy application is not administratively complete, the commissioner shall: (1) dismiss the application without prejudice; and (2) provide written notice to the applicant informing the applicant that the application is not administratively complete and is dismissed without prejudice. [The commissioner shall mark the date of filing on the application and assign a file number to the application. [(b) The commissioner shall accept an application filed in compliance with this subchapter and shall notify the applicant on acceptance of the application. [(c) The commissioner may reject an application and shall notify the applicant of the rejection if the application: [(1) has material omissions; [(2) does not describe the land claimed to be vacant adequately for the land to be located on the ground; or [(3) describes as vacant land that has been finally adjudicated in a court of this state or of the United States not to be vacant. [(d) A rejected application is terminated. No further action is taken on the application, and the land office file is closed. [Sec. 51.178. APPLICATION FOR AND DETERMINATION OF GOOD-FAITH-CLAIMANT STATUS. (a) A person may apply for good-faith-claimant status not later than the 90th day after: [(1) the date of a final order by the commissioner finding that a vacancy exists; or [(2) the date of final judgment by a court that a vacancy exists, if the commissioner does not find that a vacancy exists. [(b) The application must include certified copies of applicable county records supporting the good-faith claimant's status. [(c) The commissioner shall, after expiration of the period prescribed by Subsection (a)(2), declare whether a person is a good-faith claimant. The commissioner may consider documents filed in support of the person's good-faith-claimant status and any other relevant information. The commissioner may conduct an investigation under Section 51.185 as necessary to make a determination on the application. The commissioner has sole discretion to declare a person a good-faith claimant, and a person is not otherwise entitled to a declaration of good-faith-claimant status. A declaration of the commissioner under this subsection is not a final order and may not be appealed, except as provided by Section 51.187. [(d) A declaration of good-faith-claimant status grants a preferential right to the claimant to purchase or lease the land as provided by this subchapter. The declaration does not confer any other rights. [Sec. 51.179. IDENTIFICATION OF AND NOTICE TO NECESSARY PARTIES. (a) The applicant shall identify each necessary party by the name and last known address of each owner or claimant of land or any interest in land or of a lease on, adjoining, overlapping, or including the land claimed to be vacant as can be determined from the records of the land office and the county clerk's office. [(b) The applicant shall provide each necessary party with the notice of the commissioner's acceptance of the application, a copy of the application, and a continuance for future notices form not later than the 90th day after the date the applicant receives the notice of the commissioner's acceptance of the application. [(c) Except as provided by this subsection, a necessary party is not entitled to subsequent notices required by this subchapter unless the party requests subsequent notices. The commissioner shall notify a necessary party of a final order issued under Section 51.186. [(d) Not later than the 30th day after the date the notices are mailed under Subsection (b), the applicant must publish the notice of the commissioner's acceptance of the application in each newspaper of general circulation in the county and the general area in which the land is located for a period determined by the commissioner. The published notice must contain a description of the land claimed to be vacant.] Sec. 51.178 [51.180]. DEPOSIT. (a) The commissioner may recover from the applicant state funds expended in evaluating and investigating the application, providing notice, preparing a survey, appointing an attorney ad litem, [the investigation] and conducting hearings [conducted] under this subchapter. (b) The [Not later than the 30th day after the date notice is published as required by Section 51.179, the] commissioner shall [may] require the applicant to submit a deposit[. If required, the applicant must make a deposit] in an amount sufficient to pay the reasonable costs [of any survey and investigation required] under Subsection (a) [this subchapter] not later than the 30th day after the application commencement date [the commissioner notifies the applicant]. (c) If the amount deposited is insufficient, the commissioner shall require [may make a written request for] a reasonably necessary supplemental deposit. If a supplemental deposit is required, the applicant must make the deposit not later than the 30th day after the date the commissioner requests the supplemental deposit. (d) [The commissioner and applicant may agree to alternative payment methods to recover state funds expended in the investigation and hearings conducted under this subchapter. [(e)] An applicant may not challenge or appeal the amount of the required deposits, and the applicant's refusal or failure to make the required deposits in the period prescribed by this section terminates the application without prejudice. Sec. 51.179 [51.181]. DISPOSITION OF DEPOSITS. (a) The commissioner shall deposit all initial and supplemental deposits received under this subchapter to the credit of a separate trust account in the state treasury. The comptroller, on the commissioner's order, shall make disbursements from that account for purposes authorized by this subchapter. (b) After proceedings on a vacancy [an] application are concluded and all expenditures authorized under this subchapter are paid, the commissioner shall provide to the applicant a complete statement of all deposits and expenditures and shall remit to the applicant any balance remaining from the deposit or supplemental deposits made by the applicant. Sec. 51.180. ATTORNEY AD LITEM. (a) The applicant must provide evidence to the commissioner to establish the applicant's ownership of all interests in the land surrounding the land claimed to be vacant. (b) If the applicant fails to provide sufficient evidence, as determined by the commissioner, the commissioner shall, not later than the 30th day after the application commencement date, appoint an attorney ad litem to: (1) identify all necessary parties; and (2) represent the interests of any necessary party identified under Section 51.176(a)(3) that has not been located. Sec. 51.181. NOTICE TO NECESSARY PARTIES. (a) Not later than the 30th day after the application commencement date, the commissioner shall provide to each necessary party a written notice that: (1) informs the necessary party that a vacancy application has been filed; (2) states the application commencement date; and (3) includes: (A) a copy of the vacancy application and any attachments; and (B) a form for requesting subsequent notices regarding the application. (b) Except as provided by Subsection (c), a necessary party is not entitled to notices subsequent to the notice provided under Subsection (a) unless the party requests subsequent notices. (c) The commissioner shall notify each necessary party of a final order issued under Section 51.188. Sec. 51.182. FILING OF EXCEPTIONS TO APPLICATION. (a) Not later than the 60th day after the date of the commissioner's notice under Section 51.181(a), a necessary party may file an exception to the vacancy application, any documentation attached to the application, or any other documents or public records that may be used by the commissioner to make a determination. (b) A necessary party must: (1) file an exception with the land office on a form prescribed by the commissioner; and (2) provide a copy of the filing to each necessary party that requested subsequent notice as provided by Section 51.181. Sec. 51.183. INVESTIGATION. (a) The commissioner shall conduct an investigation of the vacancy application. (b) The investigation shall include: (1) an evaluation of the vacancy application; (2) a determination that the vacancy application was filed as provided by Section 51.176; and (3) a review of public records at the land office relating to the land claimed to be vacant. (c) The investigation may include a review of: (1) any survey conducted by a licensed state land surveyor or by the county surveyor of a county in which all or part of the land claimed to be vacant is located; or (2) any documents or public records necessary to determine whether a vacancy exists, including a review of public records relating to the land claimed to be vacant at: (A) the state archives; or (B) any county in which all or part of the land claimed to be vacant is located. (d) An investigation may include a survey requested by the commissioner under Section 51.184 or a surveyor's report as provided by Section 51.185. (e) The commissioner shall record the names of the persons consulted, the documents and surveys reviewed, and the relevant law and other materials used in the investigation. Sec. 51.184 [51.182]. COMMISSIONER'S SURVEY. (a) To investigate a vacancy application under Section 51.183, the commissioner may require a survey. If the commissioner requires a survey, the [The] commissioner shall [may] appoint a licensed state land surveyor who is not associated with the vacancy application to prepare a report as provided by Section 51.185[, or the county surveyor of the county in which the land claimed to be vacant or part of that land is located, to investigate the applicant's claim]. The commissioner may limit the scope of the work performed by the surveyor. (b) A necessary party may observe a survey conducted under this section. A survey will not be delayed to accommodate a necessary party who provides notice to the commissioner that the party intends to observe the surveyor conduct the survey. (c) The commissioner shall mail a notice of intention to survey to each necessary party not later than the 30th day before the date the surveyor begins work. The notice must contain: (1) the proposed starting date of the survey; (2) [and] the name, address, and telephone number of the surveyor; and (3) a statement informing the necessary party that any necessary party may observe the field work of the surveyor conducting the survey. (d) [(c)] The fees and expenses paid for the survey are the same as those provided by law. If the fees and expenses are not provided by law, the commissioner shall contract for fees and expenses reasonably necessary for the scope of the required work. Contracts under this subsection: (1) must include hourly rates, categories of reimbursable expenses, and an estimated completion date; and (2) may include other expenses the commissioner considers reasonable. (e) The commissioner shall adopt rules regarding the removal of an appointed surveyor on the grounds of bias, prejudice, or conflict. The rules must permit the commissioner to remove an appointed surveyor on the commissioner's own motion or on the motion of a necessary party [(d) The appointment of a surveyor is not required. The commissioner may rely on: [(1) any survey conducted by a licensed state land surveyor or a county surveyor of the county in which the land claimed to be vacant or a part of that land is located; and [(2) any documents or public records required to determine whether a vacancy exists]. Sec. 51.185 [51.183]. SURVEYOR'S REPORT. (a) Not later than the 120th day after the date a surveyor is appointed under Section 51.184 [51.182], the surveyor shall file a written report of the survey, the field notes describing the land and the lines and corners surveyed, a plat depicting the results of the survey, and any other information required by the commissioner. The commissioner may extend the time for filing the report as reasonably necessary. (b) The survey report must also contain: (1) the name and last known mailing [post office] address of: (A) each person who has possession of the land described in the vacancy application; and (B) [of] each person determined by the surveyor to have an [a present legal] interest in the land; and (2) all abstract numbers associated with surveys of land adjoining the land claimed to be vacant. Sec. 51.186 [51.184]. COMPLETION OF SURVEY. (a) The commissioner shall serve a true copy of the survey report filed by the surveyor on each necessary party, including those named in the survey report, by certified mail, return receipt requested, not later than the 30th [10th] business day after the date the survey report is filed with the land office. (b) Any necessary party may file exceptions to the surveyor's report not later than the 30th day after the date the survey report is mailed to the necessary party by the commissioner [notice of completion is received. If the commissioner does not appoint a surveyor, a necessary party may file exceptions to a survey report filed by the applicant during a period established by the commissioner]. Any exceptions must be filed with the land office and a copy must be sent by the party filing the exception to each necessary party who has requested subsequent notice under Section 51.181. Sec. 51.187 [51.185]. HEARING [INVESTIGATION]. (a) If the commissioner has not issued a final order with a finding of "Not Vacant Land" on or before the first anniversary of the application commencement date, the [The] commissioner shall order [conduct an investigation of the applicant's claim that a vacancy exists. The commissioner may conduct] a hearing to determine if a vacancy exists. A hearing under this subchapter: (1) shall be held not later than the 60th day after the date the hearing is ordered; (2) shall be conducted as [is not] a contested case hearing [and is not] subject to Chapter 2001, Government Code; and (3) may be waived by written agreement of all necessary parties and the commissioner. [The commissioner is not required to grant any hearings under this subchapter.] (b) Not later than the 30th day after the date a hearing is ordered under Subsection (a), [The commissioner shall determine the scope of any hearings to investigate an application for good-faith-claimant status and an application to purchase or lease vacant land. If the commissioner grants a hearing,] the commissioner shall provide [timely] notice of the [time and place of the] hearing date to [necessary parties and shall provide] each necessary party [an opportunity to be heard. Any other procedural rights, including the right to examine or cross-examine witnesses, may be granted in the sole discretion of the commissioner]. (c) Not later than the 60th day after the date of the hearing, the commissioner shall enter a final order as provided by Section 51.188. [The commissioner may consult with any land office employee, including the chief surveyor, or a relevant expert during the investigation. [(d) The commissioner shall record the names of the persons consulted, the documents and surveys reviewed, and the relevant law and other materials used in the investigation.] Sec. 51.188 [51.186]. COMMISSIONER'S FINAL ORDER. (a) At any time during or after an investigation of or hearing regarding a vacancy application, the commissioner may determine that land claimed to be vacant is not vacant and issue a final order with a finding of "Not Vacant Land." (b) After a hearing conducted under Section 51.187, the commissioner shall issue a final order with a finding of "Not Vacant Land" or issue an order finding [If the commissioner concludes that the land claimed to be vacant is not in conflict with land previously titled, awarded, or sold by the state, the commissioner may determine that] a vacancy exists. The commissioner shall notify each necessary party of the final order by providing [mailing] each party a copy of the [vacancy determination. The vacancy determination is a] final order [of the commissioner and may be appealed as provided by Section 51.187]. (c) [(b)] A final order finding a vacancy exists [determination order] must contain: (1) a finding by the commissioner that the land claimed to be vacant is unsurveyed public school land that is not in conflict with land previously titled, awarded, or sold by the state as established by: (A) clear and convincing proof for an application to which an exception has been filed as provided by Section 51.182; or (B) a preponderance of the evidence for an application to which no exceptions have been filed as provided by Section 51.182; (2) the [a] field note description used to determine the vacancy, which must be [of the land determined to be vacant that is] sufficient to locate the land on the ground; (3) [(2)] an accurate plat of the land that is: (A) consistent with the field notes; and (B) prepared by a [county surveyor or] licensed state land surveyor or a county surveyor of the county in which a majority of vacant land is located; and (4) [(3)] any other matters required by law or as the commissioner considers appropriate. (d) [(c)] In determining the boundaries and size of a vacancy, the commissioner is not restricted to a description of the land claimed to be vacant that is provided by the applicant, the surveyor, or any other person. The commissioner shall adopt the description of a vacancy that best describes the land found to be vacant [vacancy] and that is consistent with the investigation under this subchapter. (e) The commissioner shall attach to his final order a document entitled "Notice of Claim of Vacancy." The commissioner shall prescribe the contents of the notice. The commissioner shall file the notice with the county clerk and any county surveyor of each county in which all or part of the vacancy is located [(d) If the commissioner determines that the land claimed to be vacant is not vacant, the commissioner shall endorse the file with the finding "Not Vacant Land" and shall notify each necessary party of the determination. A finding of "Not Vacant Land" is conclusive with respect to land described in the application. A finding of "Not Vacant Land" under this subsection is a final order of the commissioner and may be appealed as provided by Section 51.187]. Sec. 51.189 [51.187]. APPEAL. (a) A final order with a finding of "Not Vacant Land" under Section 51.188 may not be appealed. The final order is conclusive regarding the land described in the vacancy application or the land investigated by the commissioner as a result of the vacancy application. (b) A final order finding a vacancy exists is subject to appeal by a necessary party that has standing to appeal under Section 51.192. The district court in the county in which a majority of the vacant land is located has jurisdiction of an appeal under this subchapter. A necessary party [person] must file an appeal not later than the 30th [90th] day after the date the commissioner's final order is issued [under Section 51.186]. All necessary parties must be provided notice of an appeal under this section by the party filing the appeal. (c) [(b)] The district court, in its discretion, may allow a necessary party [an interested person] who did not receive notice of a proceeding under this subchapter to file an appeal after the expiration of the [90-day] period prescribed by Subsection (b) [(a)]. (d) [(c)] If the commissioner has not issued a final order under Section 51.188 [51.186] on or before the first anniversary of the [date the] application commencement date [was accepted under Section 51.177(b)], the applicant may file an action in district court to determine whether a vacancy exists. The filing of an action under this subsection terminates the application with the land office. (e) A person whose predecessor in title was bound by the outcome of an appeal is bound to the same extent the predecessor in title would be bound if the predecessor in title continued to hold title. Sec. 51.190 [51.188]. SCOPE OF REVIEW. In an appeal of [The district court shall conduct a de novo review of] the commissioner's final order determining that a vacancy exists, the district court shall conduct a trial de novo [does or does not exist]. Sec. 51.191 [51.189]. ISSUES REVIEWABLE. The court may review the commissioner's declaration of good-faith-claimant status only in conjunction with a review of a final order determining that a vacancy exists. Sec. 51.192 [51.190]. STANDING TO APPEAL. A person may appeal the commissioner's final order determining that a vacancy exists if the person: (1) is a necessary party [an applicant]; (2) has a present legal interest in the surface or mineral estate at the time a vacancy [an] application is filed; or (3) acquires a legal interest before the date of the commissioner's final order. Sec. 51.193. APPLICATION FOR AND DETERMINATION OF GOOD-FAITH-CLAIMANT STATUS. (a) A necessary party may apply for good-faith-claimant status not later than the 90th day after the date the commissioner issues a final order finding that a vacancy exists. (b) The application must include certified copies of the applicable county records supporting the good-faith claimant's status. (c) The commissioner shall, after expiration of the period prescribed by Subsection (a), declare whether a necessary party is a good-faith claimant. (d) A person who is denied good-faith-claimant status may: (1) request a hearing by the commissioner; or (2) appeal the denial as part of any appeal of a final order finding that a vacancy exists. (e) If the commissioner grants a hearing, the commissioner shall: (1) determine the scope of the hearing; (2) provide timely notice of the time and place of the hearing to each necessary party; and (3) provide each necessary party an opportunity to be heard. (f) A declaration of good-faith-claimant status grants a preferential right to the claimant to purchase or lease the land or an interest in the land as provided by Section 51.194. The declaration does not confer any other rights. Sec. 51.194 [51.191]. PREFERENTIAL RIGHT OF GOOD-FAITH CLAIMANT. (a) A good-faith claimant who has been notified by the commissioner that a vacancy exists under this subchapter has a preferential right to purchase or lease the interest claimed in the land before the land was declared vacant [vacancy]. The preferential right may be exercised after a final judicial determination or after the commissioner's final order and the period for filing an appeal has expired. If the good-faith claimant does not apply to purchase or lease the land before the 121st day after the date the preferential right may be exercised, the preferential right expires. (b) The good-faith claimant may purchase or lease the vacancy by submitting a written application to the board. (c) A [The] good-faith claimant that owns each separate surface interest, a contractual right to a mineral or leasehold interest, a leasehold interest, or a royalty interest in the land occupied or used that is found to be part of or to include a vacancy is entitled to purchase or lease that same interest in the portion of the land determined to be [that is] vacant: (1) at the price and under the conditions set by the board; (2) for the duration of the contract or lease and subject to a division of the existing [the] royalty between the state and the existing royalty owners, provided that the state retains at least one-half of the royalty interest [reservations provided by the board]; and (3) in accordance with the law in effect on the date the application is filed. Sec. 51.195 [51.192]. PURCHASE OR LEASE BY APPLICANT. (a) If no good-faith claimant exists or if no good-faith claimant exercises a preferential right within the applicable period, the applicant has a preferential right to purchase or lease the land determined to be vacant on or before the 60th day [for 30 days] after the date: (1) the commissioner determines [a determination] that no good-faith claimant exists; or (2) [the expiration of] the period for a good-faith claimant to exercise [exercising] a preferential right expires. (b) An applicant who exercises a preferential right under Subsection (a) may purchase or lease the land or an interest in the land: (1) at the price set by the board; (2) subject to the royalty reservations provided by the board; and (3) in accordance with the law in effect on the date the application is filed. (c) The board shall award an applicant[, other than a good-faith claimant,] a [perpetual] nonparticipating royalty of: (1) not less than 1/64 [1/32] or more than 1/32 [1/16] of the royalty paid to the state from the production [value] of oil, gas, and sulphur; and (2) one percent of the value of all geothermal and other minerals produced. SECTION 2. (a) Except as provided by Subsection (b) of this section, Subchapter E, Chapter 51, Natural Resources Code, as amended by this Act, applies only to a vacancy application filed on or after the effective date of this Act. A vacancy application filed before the effective date of this Act is governed by the law in effect when the vacancy application was filed, and the former law continues in effect for that purpose. (b) Section 51.188, Natural Resources Code, as renumbered from Section 51.186, Natural Resources Code, and amended by this Act, applies to a vacancy application filed before the effective date of this Act and for which no appeal has been filed as of the effective date of this Act. SECTION 3. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2005.